Halliburton in Iraq fuel costs row

Washington (BBC)- Halliburton, the oil services and construction group, has been accused by US lawmakers of charging "inflated prices" when they sell petrol to US troops in Iraq.

Halliburton charges the US government more than $1.59 (£0.95) for a gallon of petrol used by the US Army Corp of Engineers in Iraq, according to US Representatives Henry Waxman and John Dingell.

The price charged is much higher than that paid by Iraq's State Oil Marketing Organisation when it imports petrol from Turkey or other neighbouring countries at 98 cents or less for a gallon.

Halliburton, which was once led by US vice president Dick Cheney, denied any wrongdoing and insisted the prices charged by its subsidiary KBR are based on the short-term nature of its contract with the Engineers.

"Based on the entire picture, to allege that KBR is overcharging for this needed service insults the KBR employees who are performing this dangerous mission to help bring fuel to the people of Iraq," said Halliburton spokeswoman Wendy Hall.

Some of the fuel payments to Halliburton come out of the Development Fund for Iraq which is meant to pay for humanitarian efforts in the country.

In a letter to the Engineers, Mr Waxman and Mr Dingell said they were concerned that money from the fund was being "squandered by paying inflated prices to Halliburton".

Halliburton's KBR subsidiary has earned $1.59bn so far from the Iraq oil contract.

The Engineers have decided to replace the Halliburton contract with two contracts awarded through competitive bidding.

Mr Waxman and Mr Dingell, which have been critical of Halliburton's involvement in Iraq for some time, urged the Engineers to investigate the matter and seek reimbursement if they have been overcharged.